THE WORLD BANK NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 AUDITED BY OFFICE OF THE AUDITOR-GENERAL FOR THE FEDERATION Plot 273, Samuel Ademulegun Street, Central Business District, Abuja. NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 TABLE OF CONTENTS CONTENT PAGE(S) CORPORATE INFORMATION 2 REPORT OF THE PROJECT MANAGEMENT TEAM 4-5 STATEMENT OF THE PROJECT MANAGEMENT RESPONSIBILITIES 6 AUDITOR'S REPORT 7-9 STATEMENT OF FINANCIAL POSITION 10 STATEMENT OF FINANCIAL PERFORMANCE 11 CASHFLOW STATEMENT 12 STATEMENT OF CHANGES IN NET ASSETS/EQUITY 13 NOTES TO THE ACCOUNT 14-16 2 NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 CORPORATE INFORMATION Project Name: Nigeria Partnership for Education Project Project ID: P143842 Total Project Cost: US$1 million Commitment Amount: US$1 million Responsible Agency: Universal Basic Education Commission UBEC Building, No. 7, Gwani Street, Wuse Zone 4, Abuja. Project Team: Mr. Iro Umar (Project Coordinator) Mr. Kayode James (Project Accountant) Mr. Mohammed Gana (Internal Auditor) Mr. Julius Adedoja (M & E) Jamila Sa'ad (EMIS) Lucy Abuh (Finance Officer) Mr. M.M. Aule (Director, Finance & Accounts) Project Focal States: Jigawa, Kaduna, Kano, Katsina and Sokoto Bankers: Central Bank of Nigeria Auditors: Office of the Auditor-General for the Federation, Abuja Project Development Objective: The development objective of the Nigeria Partnership for Education Project (NIPEP) is to improve access and quality of basic education in the above named selected states, with particular attention to girl child participation by promoting school effectiveness and improved learning outcomes, increasing access to basic education for out-of-school children especially girls and strengthening school based management planning system. NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 REPORT OF THE PROJECT MANAGEMENT TEAM The Project Management Team has the pleasure of presenting this report and accounts for the year ended 31st December, 2018. Project Overview The Universal Basic Education Commission (UBEC)/Nigeria Partnership for Education Project (NIPEP), UBEC-NIPEP Project was designed by the Project Appraisal Document (PAD) to constitute a Project Coordinating Unit responsible for providing coordination for implementation at the state level. The unit is also responsible for the project Monitoring and Evaluation (M&E) and implementation progress. Thirdly, proceeds from the funds were to be applied to issues relating to the general institutional capacity building for UBEC management and staff. The UBEC-NIPEP Project account was opened in 2015 but no funds were disbursed by the World Bank then and towards the end of 2015 the TSA came up, the account was re-opened with CBN. However, it was not until February 2016 that the funds dropped in the account with an opening balance of USD1,000,000.00. Again, the project could not access the funds until September 2016 due to administrative changes in both UBEC and the office of the Accountant General which affected some signatories to the account. Therefore, not much could be accomplished in 2016. Functions of the Team a) The team has the overall responsibilities of project planning, execution and monitoring. b) Interface with World Bank and equally ensure that funds are disbursed in line with the requirement of World Bank. c) They have the responsibilities of preparing the accounts of NIPEP-UBEC, render quarterly returns of income and expenditure and end of year financial statement d) They ensure adequate internal control policy, a continuous audit of the project and render quarterly audit report to World Bank. 4 NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 REPORT OF THE PROJECT MANAGEMENT TEAM (CONT'D) Funding of the Project The sum of USD1 million was used to fund the UBEC-NIPEP project which is an intervention grant from the World Bank. Expenditure of the Project The disbursement of the fund is designed to achieve the following: 1. Provide coordination for implementation at State level. 2. Monitor, evaluate and report implementation progress. 3. Institutional capacity building for UBEC Management and Staff. State of Affairs: As a result of the activities of NIPEP, significant improvements have been noticed in the coordination for implementation at State Level and capacity building for both management and staff of UBEC. The project however had its challenges which includes commitments of project staff to their previous office schedules among others thereby causing delay in project implementation. Result for the year: 2018 TF GPE Grant drawn down 91,635,001.29 Surplus/(Deficit) for the year 68,445,309.59 Property, Plant and Equipment 0.00 5 NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 STATEMENT OF THE PROJECT MANAGEMENT RESPONSIBILITIES The International Public Sector Accounting Standards (IPSAS) and the project Implementation Manual (PIM) require the Project Management Team to prepare financial statement for each financial year that gives a true and fair view of the state of financial affairs of the NIPEP at the end of the year and of its surplus or deficit. The responsibilities include: (a) Keep proper accounting records that disclose, with reasonable accuracy, the financial position of NIPEP and comply with the requirements of IPSAS (Cash Basis). (b) Establish adequate internal controls to safeguard its assets and to prevent and detect fraud and other irregularities in line with the PIM. (c) Prepare annual financial statements in accordance with IPSAS (cash basis) and as provided by the PIM, using suitable accounting policies supported by reasonable and prudent judgments and estimates, and are consistently applied. The Management Team accepts responsibility for the annual financial statement, which has been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with International Public Standard (IPSAS) as issued by International Public Sector Accounting Standard Board (IPSASB) and the requirement of the Nigeria Partnership for Education Project (NIPEP) Project Implementation Manual. The Management Team believes that the financial statements reflect a true state of financial affairs of NIPEP and of its surplus for the year ended 31st December 2018. The management further accepts the responsibility for the maintenance of accounting records that may be relied upon in the preparation of the financial statement, as well as adequate system of internal financial control. Nothing has come to the attention of the Management Team to indicate that NIPEP will not remain a going concern for at least twelve months from the date of this statement. Mr Umar Mr.M.M. Aule Project Coordinator Director Finance & Accounts 6 THE AUDITOR-GENER FOR THE FEDERATION Audit House, Plot 273, Samuel Ademulegun Street, Central Business District, PM.B. 128, Garki - Abuja, Nigeria. The Project Coordinator, Nigeria Partnership for Education Project/ Universal Basic Education Commission (NIPEP-UBEC), UBEC Building, No. 7, Gwani Street, Wuse Zone 4, Abuja. AUDIT OF THE NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) PERFORMED BY THE AUDITOR-GENERAL FOR THE FEDERATION AUDITOR'S REPORT Opinion I have audited the financial statements of Nigeria Partnership for Education Project (NIPEP) (Universal Basic Education Commission) for the year ended 31st December, 2018. These financial statements comprise the Statement of Financial Position, Statement of Financial performance, Cashflow Statement and Statement of Net Assets/Equity for the year then ended, and a summary of significant accounting policies and other explanatory information. In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Entity as at 31st December, 2018, and of its financial performance and its cash flows for the year then ended in accordance with International Public Sector Accounting Standards (IPSAS). Basis for Opinion I conducted the audit in accordance with International Standards for Supreme Audit Institutions (ISSAls). My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements Section of my report. I am independent of the entity in accordance with the Code of Ethics for Supreme Audit Institutions together with the ethical requirements that are relevant to my audit of the financial statements and I have fulfilled my other ethical responsibilities in accordance with these requirements and the Code of Ethics. I believe that the audit evidences obtained are sufficient and appropriate to provide a basis for my opinion. 7 Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with IPSAS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Entity's_ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the project or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the entity's financial reporting process. Auditor's Responsibility for the Audit of the Financial Statements My objectives is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with (ISSAls), will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Financial Audit Methodology (FAM), which is consistent with the Fundamental Auditing Principles (ISSAIs 100-999) of the International Standards for Supreme Audit Institutions, I exercise professional scepticism throughout the audit. I also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity's internal control. 8 * Evaluate the appropriateness of accounting policies uses and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence, obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor's report. However, future events or conditions may cause the Entity to cease to continue as a going concern. * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identified during my audit. I also provided those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be brought to bear on my independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, I determined those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I described these matters in my auditor's report unless law or regulation precludes public disclosure about the matter or, when, in extremely rare circumstances, I determined that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. A. M. AYINE, FCA Auditor-General for the Federation June 17, 2019 9 NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2018 STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER, 2018 ASSET NOTE 2018 2017 Current Asset Cash at bank 2 120,244,552.06 51,799,242.47 120,244,552.06 51,799,242.47 Non-Current Asset 0.00 257,445,418.82 0.00 257,445,418.82 Total Assets 120,244,552.06 309,244,661.29 NET ASSETS Accumulated Surplus/(Deficit) 3 11,369,817.58 303,228,494.40 IDA Fund 4 108,874,734.48 6,016,166.89 Total Net Asset 120,244,552.06 309,244,661.29 Mr. Iro Umar Mr.M.M. Aule Project Coordinator Director Finance & Accounts Date: 02/c 7R- Date: 0s 105li 10 NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENT FOR THE YEAR ENDED Z1$T DECEMBER, 2018 STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31ST DECEMBER, 2018 REVENUE NOTE 2018 2017 N N Grant Received 5 102,858,567.59 6,016,166.89 102,858,567.59 6,016,166.89 EXPENDITURE Teachers Prof. Dev. 0.00 19,904,841.00 Monitoring Visit 10,535,619.00 0.00 Capacity Building 23,511,135.00 216,239,514.00 Operational Exp 366,504.00 21,551,064.36 Total Expenditures 34,413,258.00 257,695,419.36 Surplus (deficit) 68,445,309.59 (251,679,252.53 11 NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2018 CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2018 2018 2017 N N CASH FLOW FROM OPERATING ACTIVITIES: Surplus (deficit) for the year 68,445,309.59 (251,679,252.53) Adjustment 0.00 250,004.00 Net cashflow from operating activities 68,445,309.59 (251,429,248.53) CASH FLOW FROM INVESTING ACTIVITIES: Goods 0.00 0.00 Net cash flow from investing activities 0.00 0.00 CASH FLOW FROM FINANCING ACTIVITIES Net Increase/(Decrease) in cash and cash 0.00 0.00 Net Cash flow from Financing Activities 0.00 0.00 Cash & cash Equivalents at the beginning 51,799,242.47 303,228,494.40 Cash & cash equivalent at the end 120,244,552.06 51,799,245.87 12 NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2018 STATEMENT OF CHANGES IN NET ASSETS/EQUITY AS AT THE YEAR ENDED 31ST DECEMBER, 2018 IDA FUND SURPLUS/ (DEFICIT) NET ASSET N N N As at 1/1/2018 6,016,166.89 303,228,494.40 309,244,661.29 For the year 102,858,567.59 68,445,309.59 171,303,877.18 Prior Year Adjustment -360,303,986.41 -360,303,986.41 As at 31/12/2018 108,874,734.48 11,369,817.58 120,244,552.06 13 NIGERIA PARTNERSHIP FOR EDUCATION PROJECT (NIPEP) (UNIVERSAL BASIC EDUCATION COMMISSION) FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2018 NOTES TO THE FINANCIAL STATEMENT 1 STATEMENT OF ACCOUNTING POLICIES The following are the significant accounting policies adopted by the Nigeria Partnership for Education Project-Universal Basic Education Commission (NIPEP-UBEC) in preparing its project's Financial Statement: (i) Basis of Preparation The financial statements of NIPEP-UBEC have been prepared in accordance with the International Public-Sector Accounting Standards (IPSAS) accrual basis of accounting. The financial statements are presented in Naira, which is the entity's functional currency and prepared under the historical cost convention. The preparation of the financial statements in conformity with IPSAS requires the use of certain critical accounting estimates. It also requires the Management of the project to exercise its judgements in the process of applying the provisions of the Project Implementation Manual (PIM) and reporting the amount of assets, liabilities, income and expenses. The actual results are likely to be different from the estimates. Changes in assumptions may have significant impact on the financial statements in the period the assumptions changed. Management of the project believes that the underlying assumptions are appropriate and that the Project's financial statements, therefore, present the financial position and the result fairly. The estimates and the underlying assumptions are subjected to review on an on- going basis. Any revision to the accounting estimates are revised and any further years affected. (ii) Revenue Recognition The project revenue is derived from International Development Association (IDA) loan facilities and the State Governments counterpart funds. The project recognizes revenue when the amount of income can be reliably measured and it is probable that future economic benefits will flow to the project. (iii) Inventory Inventories are valued at the lower of cost and net realizable value. (iv) Receivables Receivables are stated after making specific provision for debts considered doubtful of recovery. 14 (v) Non-current Assets All non current assets are depreciated at 20% flat rate. The decision is temporarily made after serious consultations pending the review of the organization policy on depreciation. (vi) Foreign Currency Transactions in foreign currencies are converted to Naira at the rates of exchange ruling at the date of each transaction. Balances in foreign currencies are translated to Naira at the exchange rates ruling at the Balance Sheet date and gains or losses arising on translation are credited to or charged to reserve in the period which they arise. 2. CASH AT BANK N Special Account 33,912,715.85 Draw-Down Account 86,331,836.21 120,244,552.06 The breakdown of the Dollar account is shown below: $ Balance brought down 1/1/2018 75,722.86 Addition during the year 336,245.35 411,968.21 Draw down during the year (300,000.00) Balance at the end of the year 111,968.21 A total of $300,000 was drawn down during the year under review 3. Accumulated Surplus/Deficit Accumulated Surplus/Deficit as at 1/1/2018 303,228,494.40 Surplus/Deficit for the year 68,445,309.59 Prior Year Adjustment -360,303,986.41 Adjusted Accumulated Surplus/Deficit as at 31/12/2018 U11,369,817.58 Note: The sum of N257,445,418.82 was expensed in the Statement of Financial Performance for the year ended 31st December, 2017, which ought not to reflect in the Financial Position for the same year as Non-current Asset and the balance of W102,858,567.59 from other error of principles totaled U360,303,986,41 as prior year adjustments. 15 4. IDA Funding Opening Balance as at 1/1/2018 6,016,166.89 Funding for the year 102,858,567.59 Closing Balance as at 31/12/2018 108,874,734.48 5. Grant Received During the year $ Rate N March 2018 277,137.15 306.00 84,803,967.90 December 2018 59,108.20 305.45 18,054,599.69 336,245.35 102,858,567.59 Note Property, Plant and Equipment UBEC-NIPEP did not purchase any property, plant and equipment in respect of the project before and during the year under review. 16